Microsoft Testing Its Own ‘Smartphone’ With Asian Suppliers

As per a report from Wall Street Journal, Microsoft Corporation (NASDAQ:MSFT) is working with its Asian component suppliers, and is testing its own smartphone design. The news clearly highlights the fact that computer-software giant is also attracted towards the rapidly expanding segment of Smartphones.

Some of the sources at Microsoft Corporation (NASDAQ:MSFT)’s Asian suppliers did confirm the news, but they were unsure if a product will go into mass production. Microsoft’s smartphone is currently being tested with a screen size of four and five inches, which is close to iPhone 5’s four-inch screen and Galaxy S III’s 4.8-inch screen.

After Microsoft Corporation (NASDAQ:MSFT) unveiled its first homegrown computing device, the Surface Tablet, rumors of Microsoft coming up with its own smartphone have been making rounds. Microsoft’s Surface tablet, which went on sale last week, has been scorned by its peers, alleging the company is unfairly competing with their personal-computer models running Microsoft’s Windows software. Apart from tablet, the company also makes Xbox video game consoles and has been notoriously famous for directing how Windows-powered PCs and smartphones made by its partners look, perform, and are pitched to consumers.

In an interview with The Wall Street Journal on Monday, Microsoft Chief Executive Steve Ballmer declined to comment on whether Microsoft would make its own smartphone. “We’re quite happy this holiday [season] going to market hard with Nokia Corporation (NUSE:NOK), Samsung, and HTC,” said Mr. Ballmer, referring to companies making smartphones powered by Microsoft software. “Whether we had a plan to do something different, or we didn’t have a plan, I wouldn’t comment in any dimension”.

The Smartphones market is rapidly expanding, with massive demand in China and other emerging markets. Global smartphone shipments are expected to jump 38.8 percent this year, to 686 million units, as per research firm IDC.

In 2010, Microsoft Corporation (NASDAQ:MSFT) launched a range of youth-oriented smartphones called the Kin, but soon dumped the plan. The devices carried Microsoft’s brand, but were manufactured by Japanese electronics company Sharp Corp. If the software giant moves ahead with its smartphone plans, it will mark a shift in its long-standing practice of producing software only and leaving the rest of the value chain, design, features, and marketing, of the computing hardware to partners, such as Hewlett-Packard Company (NASDAQ:HPQ) or Samsung Electronics.

About the author

Aman has an MBA in Finance, and loves to write and research stocks.
His experience includes:
Presently, a director of a financial research firm.
Worked for three years with AIR worldwide (Catastrophic Risk Modeling & Consulting Firm) as a Risk analyst-II.
Worked as a marketing Head for 3+ years.